India's largest cement company by installed capacity- UltraTech Cement Ltd announced its foray into the 'cables and wires' business on Tuesday. The company plans to spend a total of Rs 1800 crore for this venture.UltraTech's Foray Into Cables & WiresUltraTech Cement's board has approved a capex of Rs 1,800 crore over the next two years for the company’s foray into the market. The company plans to set up a plant in Bharuch, Gujarat. The expected commissioning date for the plant is earmarked for December 2026, and the company plans to leverage its connection with end customers to gain a share of the customers’ wallet.Rational Behind The InvestmentAs per the company's Chairman Kumar Mangalam Birla, the venture aims to expand UltraTech's presence in the construction value chain. The company, in its press release, stated that it aims to meet the growing demand for cables and wires across various sectors like residential, commercial, infrastructure, and industrial applications.It also noted how the cables and cables industry has achieved a revenue compounded annual growth rate of 13% between FY19 and FY24 due to the migration of the industry from the unorganised to the organised market.Financial ImpactIf one has to look at the financial impact for the company, the average industry asset turnover stands at 4-5x times. Assuming a 4.5 times asset turnover ratio, the revenue potential of the investment stands at Rs 8100 crore.The industry also operates at an Ebitda margin between low to mid-teens. Assuming a 10% margin, the potential Ebitda for this business could be around Rs 810 crore, which is 4% of the FY27 consolidated consensus Ebitda estimate of the company as per Bloomberg.As per Citi Research, which assumes a revenue-to-gross-block multiplier of 7 times for the wires and cables industry, the estimated revenue potential of the business stands at Rs 1200 crore, which accounts for 14% of the brokerage's FY27 revenue estimates for the company.!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r